Gates Testifies -- Via 1998 Videotape

(Des Moines, Iowa) Lawyers began presenting evidence Friday in a class-action lawsuit against Microsoft Corp., starting with a 1998 videotaped deposition of Bill Gates. Gates appears cooperative and at times irritated as he is questioned by a U.S Department of Justice attorney on the tape, which was recorded in August 1998.

Plaintiffs' attorney Roxanne Conlin, who fought to have the videotape shown to jurors, plans to play all 10 hours of the tape.

Jurors will be asked to determine whether Microsoft engaged in anticompetitive behavior that violated Iowa laws from May 18, 1994, through June 30, 2006, in operating system, word processing and spreadsheet software markets.

Earlier Friday, Microsoft attorney David Tulchin completed his opening statement by preparing jurors for the tape they were about to see.

"The lawyer taking the deposition in asking Mr. Gates questions was indeed himself aggressive and we think you'll see that that lawyer was intent on getting under Mr. Gates' skin," Tulchin said. "And there were times when Mr. Gates shows his annoyance."

He asked jurors not to focus on the interaction between the lawyer and Gates but on the substance of Gates' testimony, which he said would support what Microsoft's evidence at the trial will show.

Gates will be called as a Microsoft witness and is expected to testify in person early next year, the company's attorneys said.

The videotape was made for a case in which the U.S. Department of Justice alleged that Microsoft violated federal antitrust laws in the way it maintained its monopoly in personal computer operating systems between July 15, 1995, and June 24, 1999.

Microsoft reached a settlement with the government to resolve that case.

Some of the conclusions from that case can be considered by the jury in the Iowa lawsuit.

Conlin said expert witnesses in the Iowa case will contend Microsoft broke the state's laws, and the lack of competition forced consumers to pay more for software than they would have otherwise.

Economists for the plaintiffs will claim Iowans are owed more than $330 million because of the software overcharges and another $40 million because actions by Microsoft allegedly caused software to be more susceptible to hackers.

Tulchin concluded his opening statement by telling jurors that Microsoft will show it did not break Iowa laws. Instead, it beat competitors with high quality software products and low prices.

"We think the evidence will be that Microsoft's high market shares in all three of these markets are a result of perfectly legitimate pro-competitive business practices," he said.

He said the plaintiffs must prove prices would have been lower if Microsoft's alleged anticompetitive behavior had not existed.